Finns have stretched investments

The manufacturer of harvesting equipment Vilakone postponed construction of the plant in St. Petersburg. In the coming years, the company will collect equipment in leased areas in Levashovo. This will reduce the cost of products and apply for state contracts without risky investments.
Origin source
The release of cleaning equipment under the brand Wille will begin before the end of 2018 in the industrial park "Orion" in Levashovo. The company does not finally refuse to build from scratch and considers it as the next stage, Vilakone managing director Juha Kumlander told Fontanka. The reason for the adjustment of plans could be the distrust of Finnish investors in the Russian economy and the reluctance to reduce jobs in their homeland, market participants say.

Vilakone announced its intention to localize the production of equipment for public utilities in St. Petersburg back in 2017. In accordance with the agreement signed with Smolny at the St. Petersburg Innovation Forum, the company planned to build a full-cycle production complex with after-sales service by 2020. Investments then were estimated at 750 million rubles.

Later, the head of the Industrial Policy and Innovations Committee, Maxim Meixin, during the presentation of the Fontanka study “The Most Influential Finnish Companies” reported that the manufacturer had already found the site and in the summer of 2018 plans to enter construction.

According to Fontanka, the company considered sites in the industrial parks of Greenstate and Marino, but decided to abandon the construction from scratch in favor of renting. As a result, the production of Vilakone took 2350 square meters in the industrial park "Orion" in Levashovo. For comparison, the area of ​​its own factory in the Finnish city of Loimaa is 15,000 square meters. m

Details of the project manufacturer does not disclose. However, according to a source close to Vilakone, at the first stage in St. Petersburg only the most popular model of harvesting equipment will be produced - Wille 465. Then it is planned to build another three models that are now on the Russian market, Wille 265, Wille 365 and Wille 665.

The production volume will be 200 cars per year, but in the future it can be increased to 300. For comparison, according to market participants, about 400 units of Wille equipment work in Russia, of which about 200 in St. Petersburg imported for 10 years of brand presence in Russia . “Vilakone expects to significantly increase sales. In addition to Russia, products can be supplied to other CIS countries, ”said the source.

It will be possible to make such a breakthrough by reducing the price - the assembly in Russia will make it possible to reduce the cost of cars by a third. Now the model Wille 465, imported from Finland, costs about 9 million rubles. At the first stage, the components will be imported from Finland, but in the future the company intends to strengthen localization by placing orders at local enterprises.

In addition, Russian production will allow Vilakone to participate in public procurement: now foreign equipment can not be purchased for state and municipal needs.

The reason for the change of plans and the actual amount of investment in Vilakone was not named. But, according to experts, the rented space will be much cheaper. The cost of premises in Orion is 500-550 rubles per square meter. m per month. Thus, Vilakone expenses can amount to 14-15.5 million rubles per month without taking into account the cost of purchasing and installing equipment. “Given that the contract with the Finnish company is long-term in nature, the discount from the base rate could be about 15%,” comments Sergey Fedorov, head of the warehouse and industrial real estate Rusland SP.

However, according to Juha Kumlander, the rented site will be only the first stage. Own plant may appear "in the coming years." But, according to design contractors and owners of industrial parks, whom the company considered as possible partners, the interrupted negotiations have not yet been resumed. “It is unlikely that construction will begin before 2019-2020,” says one of them.

An investor could change plans because of pressure from the Finnish authorities, a source close to Smolny said. “By building a plant here, they create competition for a home plant. Finns are interested in investing in Russia, but not in reducing jobs in their home countries, ”commented the publication’s source. For example, earlier, Ensto announced the transfer of a heater assembly line from Finland to Russia.

Market participants believe that the company could have its own concerns about the return on such large-scale investments. In recent years, investors from Suomi have not shown much activity in the market of the northern capital. So, according to the Industrial Policy Committee, of the 48 facilities launched in St. Petersburg over the past three years, there were 12 factories with foreign participation. Of these, only two are Finnish - in addition to Ensto mentioned above, the manufacturer of beams and connections for reinforced concrete Peikko has acquired its own capacities.

Uncertainty about the future of the players add new sanctions and a possible reaction to them in Russia, said the head of the Finnish-Russian Chamber of Commerce Jaana Recolainen. Since the law on retaliatory measures adopted in April allows for very broad interpretations, the risks in the Russian Federation for investments and foreign companies have greatly increased.

On the other hand, the weakening of the ruble can make imported Finnish equipment less in demand and lead to a loss of market share. According to the Finnish customs, in the first half of 2018, Finland supplied Russia with machinery and transport equipment for 695 million euros, which represents 40% of the total imports. Growth by last year was only 4%, whereas in the same period of 2017, the pace was 10 times higher.

“Vilakone took a long time to choose a plot. In order not to miss the chance, they decided to start work on the rented premises, ”consider one of the Finnish companies working in St. Petersburg. By making a "trial", the manufacturer can convince shareholders of the need for larger investments.